Gap widens between rates for rewards and non-rewards cards

The difference in interest rates between consumer non-rewards credit cards and rewards credit cards has increased over the course of July 2011, according to recent figures published by IndexCreditCards.com.

As of July 31, the average consumer credit card rate was 16.50 percent, up from 16.43 percent in mid-July. The interest rate on rewards credit card offers, however, rose to 17.27 percent from 17.09 percent mid-month, while non-rewards offers went down. The average now sits at 14.72 percent as opposed to 14.88 percent in mid-July.

The best credit card offers often come with generous promotions in terms of free travel, hotel stays, cash back, or other gifts. These special features are not without cost to the consumer, and that cost is becoming increasingly apparent as the difference in credit card rates widens.

Business credit cards show similar divide

The same widening gap between rewards and non-rewards card offers can be seen in business credit cards. At July's end, business non-rewards rates were down to 14.47 percent from 14.60 percent in mid-July, and business rewards card rates are stable at 16.05 percent.

Student credit card rates remain stable

Student credit card rates remained unchanged on average over the course of July and are currently at 16.67 percent.

Strong credit slightly less of an advantage

At the same time, the state of an applicant's credit rating became less important, with the gap between rates offered to those with strong credit and those with average credit declining to 4.02 percentage points from 4.10 percent since the middle of July.

This growing divide between rewards and non-rewards credit card rates means that smart consumers who carry any kind of account balance will reconsider the best business credit card or consumer credit card for their needs, and whether they might be better served in the long run by a card with fewer perks that offers a lower interest rate.